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In short
- Microsoft has valued its OpenAI stake at $135 billion and extends exclusive rights to frontier models until 2032.
- OpenAI can now work with external developers and release open models, while Microsoft can pursue AGI independently.
- The update comes as Microsoft faces an antitrust suit that says it used Azure’s dominance to inflate ChatGPT’s prices.
On Tuesday, Microsoft and OpenAI announced a restructured partnership that values the Redmond giant’s stake at $135 billion, about 27% of OpenAI’s new public benefit company, even as the two companies navigate antitrust scrutiny and a federal lawsuit alleging computer monopolization.
The revised pact supports the conversion of OpenAI into OpenAI Group PBC under the non-profit OpenAI Foundation, and positions Microsoft as the company’s “frontier model partner” until 2032, according to a Tuesday. declaration.
Board Chairman Bret Taylor and CEO Sam Altman can now control the powers of appointment and removal over the PBC board, consolidating Altman’s authority.
OpenAI will continue to channel about 20% of revenue to Microsoft, although both parties expect the flow to end once an independent panel certifies that general artificial intelligence has been achieved.
Microsoft retains exclusive IP licenses for OpenAI’s models and products until 2032, including post-AGI systems, but has no rights to any consumer hardware that OpenAI produces, according to the statement.
The AI giant can collaborate with third-party developers on joint products, implement open weight models that meet security thresholds, serve US national security agencies in any cloud infrastructure, and independently pursue its AGI research capabilities, previously blocked by Microsoft’s exclusivity provisions.
API products developed with third parties will be exclusive to Azure, while non-API products can be served on any cloud provider.
Microsoft and OpenAI did not immediately respond Decrypt’s request for comment.
The announcement comes amid mounting legal pressure, as a class-action lawsuit filed two weeks ago alleges Microsoft rigged its 2019 Azure exclusivity agreement to computational throttle capacity for ChatGPT, artificially keeping subscription rates at competitor levels “100 to 200 times” during February’s AI price conflict.
“The AI we build today will shape our tomorrow. The path we are on today, dominated by centralized AI, is full of danger,” said Jiahao Sun, CEO of FLock.io. Decrypt. “When a few powerful entities control AI, we risk creating systems that reflect a narrow worldview, perpetuating prejudices and eroding trust.
OpenAI has also committed to buying $250 billion in additional Azure services, although Microsoft has given up rights of first refusal as a computer supplier.
The requirement that OpenAI source all computational resources exclusively from Microsoft had become a major point of friction as ChatGPT’s 800 million weekly users and search requests drove up infrastructure costs.
The partnership began in July 2019 with a investment of $1 billion which made it the exclusive cloud provider of Microsoft OpenAI, and deepened in January 2023 with a multi-billion dollar expansion which positioned Microsoft as the primary supporter of OpenAI.
The latest announcement also comes as OpenAI disclosed about mental health signs among its user base, about 1.2 million weekly users, or about 0.15% of the active, showed explicit indicators of suicidal planning or intent.
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